Thousands of top-rated mortgage bonds plummeted in value in 2008, showing that S&P and Moody's engaged in a "race to the bottom" to inflate their grades to win business from Wall Street banks, according to a report released in April by a Senate subcommittee. The collapse contributed to the credit- market seizure that brought down Lehman Brothers Holdings Inc. and Countrywide Financial Corp.

Since then, Jules Kroll, the founder of the private- investigation firm that bears his name, and billionaire Joe Mansueto of Morningstar Inc. entered the business. Their firms have gained little market share as bond investors and regulators continue to use S&P, Moody's and Fitch Ratings to measure risk.

The three companies provide 97 percent of all credit ratings, the U.S. Securities and Exchange Commission said in a September report. S&P leads with a 42 percent share, Moody's holds 37 percent and Fitch, majority-owned by Paris-based Fimalac SA, is at 18 percent.

"It's very hard to convince someone to stop using S&P and Moody's ratings because they're such a market norm," James Gellert, chief executive officer of Rapid Ratings, which charges investors rather than issuers for its grades, said in a telephone interview. "If you don't have one, people will wonder what's wrong with you."

Even Namibia decided it needed a second rating, from Moody's, in September before selling $500 million of bonds to foreign investors for the first time. The southern African nation got a Baa3, the lowest level of investment grade and equivalent to the BBB- it already had from Fitch. "Investors want a second opinion," Saara Kuugongelwa-Amadhila, the country's finance minister in Windhoek, said in a telephone interview.

Moody's standard fees to rate U.S. municipal bonds jumped as much as 21 percent this year, according to lists provided to Port Arthur, Texas. Some fees fell while others rose, said Michael Rowan, managing director of the company's commercial group, established last year to ensure that analysts are separated from business negotiations. The prices are "fair and reasonable," he said.

"We don't look to compete on price," Rowan said in a telephone interview. "We look to compete based on the quality of our ratings and the value of our ratings."

Linda Huber, the company's chief financial officer, said in September that there are limited alternatives. "A Moody's rating is an important thing," Huber said at a conference for stock investors organized by Goldman Sachs Group Inc. "If it's not there, it's noticed by the market. Cost of capital will go up."

Moody's and S&P are able to raise prices because the two are a "natural duopoly," Warren Buffett, the billionaire chairman of Omaha, Nebraska-based Berkshire Hathaway Inc., told the Financial Crisis Inquiry Commission last year. Berkshire is Moody's largest shareholder, with a 12.8 percent stake, and bought into the business because of that pricing power, he said.

'Unwilling Customer'